Providers, and probably many Medicaid beneficiaries, in the Commonwealth of Kentucky are acutely aware of the problems with the Medicaid managed care waiver from its very start on November 1, 2011. In April 2012, Wyatt filed suit on behalf of Appalachian Regional Healthcare (ARH) and obtained an injunction against the managed care organization (MCO), CoventryCares of Kentucky. The injunction prevented Coventry from cancelling its contract with ARH until after the fall open enrollment period. This allowed thousands of ARH patients to change MCOs so they could continue receiving care from ARH hospitals and doctors. At that time federal Judge Karl Forester said in entering his injunction that Coventry's actions had "created a serious crisis in the Medicaid community in Eastern Kentucky..." The Judge however, continued to express the hope that the crisis was only temporary and things would get better. Unfortunately, things did not get better. Soon after, Coventry notified its members that it was cancelling its contract with King's Daughters Medical Center in Ashland. This meant, for example, that after November 1, 2012, twenty-four out of thirty-three counties in the Eastern Kentucky Medicaid Regions 7 and 8 did not have a hospital in the Coventry network where obstetric services were available. So Wyatt asked the federal court for permission to add King's Daughters to the lawsuit alleging that Coventry was effectively "redlining" Eastern Kentucky because its Medicaid population was sicker and more costly to treat. Another MCO, Centene's Kentucky affiliate, Kentucky Spirit, sued the State for errors and misrepresentations in the RFP bidding process and announced that it was leaving Kentucky in June 2013. After the Fall open enrollment period was closed, the third MCO, WellCare of Kentucky, began giving hospitals notice that it was terminating their contracts unless they agreed to reduced rates claiming that these actions were necessitated due to the inadequacy of the capitated rates. It also came out that the three MCOs had received about $1.3 billion in capitated payments during the first eight months on the waiver but were holding back about $500 million of that in payments owed to providers. Because of these, and many other problems, including the fact that the stated access standards in the waiver application did not conform to federal law, Wyatt filed a motion in the federal court on January 11, 2013, asking permission to file a complaint adding the federal Centers for Medicare and Medicaid Services to the ARH lawsuit.
If you would like to see a copy of the motion, please click here.